Kingfisher, the owner of B&Q, had a raft of good news for investors today which sent its shares soaring to a 14-year high.
Chief executive Sir Ian Cheshire said: “Our prospects remain bright. Looking ahead we are well placed to benefit from a pick-up in consumer spending as Europe’s economies return to growth.”
In the meantime, he is returning an extra £200 million to shareholders on top of the £220 million dividend pay-out for last year. He has also sold Kingfisher’s 21% stake in German home improvement chain Hornback for £195 million and is seeking a domestic partner for its B&Q chain in China which has been nursed back to health.
Cheshire said: “We have a structurally strong balance sheet over the next three years and I am not interested in us just sitting on a cash pile. We have money to invest in new markets and will decide as we go to make further returns either through share buybacks or increased dividends.”
He said the group had got through a challenging year — particularly with the dire weather of the first quarter of 2013 — “in good shape”. B&Q actually reported its first growth in like-for-like sales in four years and announced full-year pre-tax profits rose 4% to £744 million. Screwfix was again the strongest growth story in the UK, with sales up 17.6% to £665 million but still way behind B&Q’s £4.46 billion of revenues, up 0.4%.
This year has got off to a decent start with plants and barbecues selling well. But Cheshire warned that while the first quarter would look strong compared with last year, it should not be taken as a lead for the whole year. In France, where the group trades under the Castorama and Brico Depot brands, sales were up 5% at £4.42 billion but profits remained flat at £396 million.
Cheshire said he believed in the long-term prospects of the French business. “It’s all about consumer confidence and I’m betting on a solid French recovery,” he said.
The shares rose 23.1p to 429.7p.
